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Consumer Focus Calls for ISPs to Offer Pay-as-you-go Broadband or Social Tariffs

Posted: 16th Sep, 2011 By: MarkJ
ukconsumer opinionConsumer Focus (CF), a statutory UK organisation that campaigns in support of consumer rights, has called upon the communications regulator ( Ofcom ) to "consider the option" of forcing internet providers (ISP) to offer either a Pay As You Go (PAYG) or very-low-cost social tariff broadband solution for those who cannot afford or are unable / unwilling to "take out a longer contract".

The recommendation forms part of CF's latest report, 'Scotland's Digital Needs', which makes a series of proposals aimed at both improving broadband take-up and making the wider internet access market more accountable. The report also calls for the UK and Scottish Government to agree a "single, joined-up action plan for the roll-out of next-generation broadband to all consumers in Scotland" with "clear and ambitious targets" up to 2020.

Scotland's Digital Needs Quote

"We believe that, given the benefits it can offer to consumers, broadband is no longer a luxury but a necessity which should be accessible to all, and that more could be done to make it more affordable for those on the lowest incomes.

We therefore believe that all broadband providers should consider whether and how they might develop very-low-cost broadband packages – effectively social tariffs – targeted at consumers on low incomes. These tariffs could, for example, be made available to consumers who are in receipt of particular welfare benefits."

...

"We believe that Ofcom and broadband providers should also consider the potential for the more widespread introduction of payas-you-go-tariffs for fixed-line broadband services. Tariffs of this nature could benefit consumers who do not wish to, or who are not in a position to, take out a longer contract, and improve broadband take-up among this group.

Ideally broadband providers should make these types of tariff available of their own accord, but if this does not happen, Ofcom could consider the option of requiring providers to offer pay-as-you-go broadband services.

It is important to note, however, that the experience in mobile phone markets suggests that pay-as-you-go services would be likely to have higher costs attached to them, and may therefore lead to disadvantaged consumers paying more for their broadband services than consumers who are able to afford a longer-term contract."

However the report uses experience from the mobile phone market to suggest that PAYG services could "have higher costs attached to them" and might thus lead to disadvantaged consumers "paying more for their broadband". It also fails to define what such services would look like; many, predominantly smaller, ISPs already offer monthly contracts.

A series of additional recommendations are also made for broadband ISPs, from a call for the advertising of "up to" speeds to be scrapped in favour of a "typical speed range" to a demand that all providers should "publish their own complaints data", regardless of whether this is required by Ofcom or not.

Finally Consumer Focus puts its weight behind growing calls for the forthcoming auction of new Mobile Broadband spectrum (800MHz and 2.6GHz) to focus on boosting the coverage in rural areas.
Scotland's Digital Needs (PDF)
http://www.consumerfocus.org.uk/scotland/files/2011/09/Scotlands-digital-needs.pdf
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